Did the Nation-Wide Implementation of e-FMS in MGNREGS Result in Reduced Expenditures? A Re-Examination of the Evidence

Deepti Goel (), J. V. Meenakshi and Zaeen De Souza
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J. V. Meenakshi: Delhi School of Economics
Zaeen De Souza: Azim Premji University

No 15484, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper revisits a part of the analysis by Banerjee et al. (2020), in which they examine the consequences of the nation-wide scale up of reforms to the funds management system (e-FMS) in India's national workfare programme, using a two-way fixed effects specification. They report a substantial 19 percent reduction in labour expenditures. We exploit the recent literature that highlights the limitations of the TWFE estimator in the presence of staggered roll out and effect a Goodman-Bacon decomposition of the TWFE coefficient, to pinpoint sources of identifying variation. We undertake a detailed examination of subsamples of six constituent and valid DiDs based on timing of treatment that are averaged into the TWFE coefficient to identify heterogeneity in treatment effects. This disaggregated subsample analysis does not support the conclusion of any reductions in MGNREGS labour expenditures, suggesting that the TWFE coefficient based on the full sample is indeed biased.

Keywords: MGNREGS; public funds management; e-governance (search for similar items in EconPapers)
JEL-codes: D73 D78 H53 H75 I38 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2022-08
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Citations: View citations in EconPapers (1)

Published - published as 'Did the nationwide implementation of electronic fund management in the Indian employment guarantee scheme result in reduced expenditures? A re-examination of the evidence' in: Review of Development Economics , 2024, 28 (4), 1994-2013

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Working Paper: Did the nation-wide implementation of e-FMS in MGNREGS result in reduced expenditures? A re-examination of the evidence (2022)
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